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Can Dwight end up a Net this summer?

Chris Sheridan wrote a piece for SheridanHoops.com saying that Dwight Howard can leverage the Lakers into doing a sign-and-trade this summer which would result in Howard ending up a Brooklyn Net.

It’s a difficult proposition. One of the features of the new CBA is stiffer penalties for taxpaying teams — and here “taxpaying” is defined to mean more than $4 million above the tax line, a point called “the apron.” Why $4 million? Because that’s what they negotiated.

One of these penalties, starting this summer, is restricted access to sign-and-trade transactions. A team cannot receive a player in a sign-and-trade if, at the conclusion of the trade, the team is above the apron. They can still send a player away in a sign-and-trade transaction, and they can receive a player who himself is not signed-and-traded. But they can’t trade for a guy who is signed by another team if their team salary is a penny above the apron after the trade is done.

The salary cap, tax level, and apron won’t be known for sure until this July when the league concludes its annual audit. However, the league periodically provides the teams with forecasts, and teams also project their own amounts internally. Most of the teams I’ve talked to are using a figure of $71.5 million to $73 million for the tax line, which would put the apron at $75.5 million to $77 million.

So here’s Sheridan’s proposition — the Nets will be able to complete a sign-and-trade transaction for Dwight Howard, which will result, at the conclusion of the trade, in the Nets’ team salary being $77 million or less (let’s use the high end of the range, in order to be as generous as possible).

Sheridan acknowledges the difficulty, writing, “…my cap guru said it would be difficult but NOT impossible.”

Well, yeah. So’s winning the lottery.

Let’s look at the numbers. The Nets are currently committed to $85,562,060 for 2013-14 — Marshon Books, Reggie Evans, Kris Humphries, Joe Johnson, Brook Lopez, Tornike Shengelia, Tyshawn Taylor, Mirza Teletovic, Gerald Wallace, C. J. Watson, and Deron Wiilliams. Watson has a player option, and since it’s in his control we have to assume he will pick it up and remain on the Nets’ books.

They will also have their own first round draft pick this summer, which will add to their team salary. But since this is in the team’s control, let’s assume the work out a draft day trade and get it off their books.

Dwight Howard currently makes $19,536,360, and can sign for up to 105% of that amount, or $20,513,178. I personally don’t think he will take less than the max, and if Brooklyn is planning to make a deal they have to be factoring in his full salary. So let’s put him in at the full $20,513,178.

Add the two figures together — Brooklyn’s $85,562,060 team salary and Dwight’s $20,513,178 salary, and you get $106,075,238. Subtract our projected $77 million apron and you get $29,075,238.

That’s how much salary the Nets have to clear from their books either before the trade or as a result of the trade in order to be eligible to trade for Howard in a sign-and-trade transaction.

Now let’s look at how it might happen. Sheridan brings up the old leverage trick — “you work out a sign and trade, or I leave you with nothing.” It’s a good idea in theory, and it has even been successful at times. But teams typically don’t take on players they don’t want in these kinds of situations.

Of the teams I’ve talked to, there’s near unanimity in saying they’d rather let the player walk than make a bad trade.

It’s no secret that the Lakers have 2014 circled on their calendars. Currently their only player signed past 2014 is Steve Nash, who will be 40 at the time and can be waived. The Lakers would then apply the Stretch provision to reduce his 2014 cap hit to around $3 million. No one else is on the team’s books.

The Lakers’ plan is thought to be this: 1) Re-sign Howard this summer; 2) Clear the books in 2014; 3) Go shopping. The team would have a LOT of cap room, and the 2014 free agent class features a certain guy now playing for Miami who would look pretty good in purple & gold.

So the Lakers would be loathe to take on salary that is signed past 2014. That includes Brooks (team option), Evans, Johnson, Lopez, Shengelia, Taylor, Teletovic, Wallace and Williams.

Sheridan says the Nets would not include Lopez in any deal (they want to put him at power forward next to Dwight). He doesn’t say that Williams is off the table, but let’s assume he’s also central to the Nets’ plans, and one of the big carrots bringing Howard to Brooklyn in the first place — so let’s leave him off as well.

From the Lakers’ standpoint, I just don’t see them trading for Johnson (owed $48 million in 2014-15 and 2015-16) or Wallace (owed $20 million in 2014-15 and 2016). The Lakers simply won’t alter their 2014 plans for either of these players.

So who does that leave? Brooks (signed past 2014), Evans (signed past 2014), Humphries, Shengelia, Teletovic (signed past 2014) and Watson. Let’s be generous and say the Lakers would take on all of these players, because none of hem has a big salary in 2014, and won’t significantly alter their 2014 plans.

So how much do these players add up to? $20,030,579.

Remember, the Nets need to clear at least $29.075 million to even have a chance.

So now we’re into even sketchier alternatives, like finding a third team in the deal who would take a player like Wallace for nothing. Do these things happen? Yes. But deals are much more likely to fall apart when you start bringing in additional teams. In fact, a deal sending Howard to the Nets fell apart just last season when one of the ancillary teams backed out.

So is a Dwight Howard sign-and-trade to the Nets possible? Yes, it’s possible.

But is it likely? No — in fact, it’s very unlikely. In the words of one Eastern Conference executive I spoke to today, “that ship has sailed.”

But if it DOES happen, I’m buying a lottery ticket.

There’s a famous cartoon by Sidney Harris which shows two scientists reviewing a series of equations on a blackboard. One of those steps reads, “then a miracle occurs.” One of the scientists is pointing to that step, and the caption reads, “I think you should be more explicit here in step two.”

Exactly how will such a Howard trade get done? Sheridan provides hints, but ultimately he doesn’t say. I like Chris Sheridan as a person and admire him as a basketball writer. But I think he needs to be more explicit in step two.

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4 thoughts on “Can Dwight end up a Net this summer?”

Interesting article, Larry! And nice to see your thoughts here in detail beyond just 140 characters!

One thing I have always wondered regarding the salary cap situation is the state income tax. My assumption is the base salary (pre-tax) gets counted towards the salary cap. So if thats the case, doesnt that mean, teams like Miami or Houston has unfair advantage because of no state income tax? People say Lebron took less than maximum to leave Cleveland, but with no state tax in Miami, its not much of a loss for him. But Cleveland takes bigger cap hit if he resigns with them than Miami. I wonder if state tax situation should be taken into consideration when counting towards salary cap.

Sheridan’s problem us that he constructs everything to help the Nets get what they want, but never considers what other teams goals are. Obviously he’s preaching to a majority New York readership, but it doesn’t help his credibility.

As you say, if the Lakers trade Howard to Brooklyn, buy that lotto ticket…

Nice article. But two assumptions are wrong. Of course Lopez and DWill are on the table for D. Howard. In fact, for a revitalized D. Howard who returns to his MVP level form, they are both on the table in a two for one deal. Without any question or hesitation. But thanks for giving us such a nice explanation. It does seem there is no way of doing this deal without including Lopez (or DWill). But I also see a world in which Lopez and Humphries are packaged for D. Howard by a Laker GM that really really wants an All Star center and who is convinced that D. Howard is not playing for the Lakers next year.

Now personally, I think Howard will take the money, the sun, and the California living and resign with the Lakers. But if he really wants to blaze a new trail, then Brooklyn is where he should have been all along and it is where he should go.

Lopez is never off the table in a Dwight Howard deal. A sign-and-trade package of Lopez and Humphries, who will be a big useful expiring contract next season is frighteningly plausible if Howard were to tell the Lakers he’s signing elsewhere (Dallas, Atlanta, etc) if he doesn’t get traded to Brooklyn. That would still leave the Lakers with a franchise center to build around with their only committed salary in 2014. I have no idea why this scenario was completely written off.